Consolidated Results for First Quarter FY2025
–Segment-
 Business profit increased in Rolling Stock due to improved profitability and recovery from a temporary decline in profit in the previous year
 Business profit in Aerospace Systems declined due to a temporary decline and increased shipments of newly manufactured commercial aircraft engines
–Statement of Profit and Loss-
1.Selling, general and administrative expenses increased in line with revenue growth, but the SG&A ratio declined
2.Despite the nominal tax burden ratio on quarterly
profit before tax standing at a high level of 56%, this was a temporary effect due to the use of a simplified tax calculation method. The full-year rate is expected to converge toward the effective tax rate
3.In April 2025, a 20% stake of Kawasaki Motors,
Ltd., a business subsidiary in PS&E, were transferred to ITOCHU Corporation, resulting in an increase in non-controlling interests

Statement of financial position
Decreased in Aerospase, Plant, and PS&E etc.
2.A portion of the 80.0 billion yen proceeds from the
transfer of a 20% stake in Kawasaki Motors, Ltd., a PS&E business subsidiary, to ITOCHU Corporation was allocated to the repayment of interest-bearing debt

3.Increased in non- controlling interests
resulting from the transfer of a 20% stake in Kawasaki Motors, Ltd., to ITOCHU Corporation

–Cash Flows-
FY’24 Q1：
Operating cash flows were at
the same level as pre-tax income due to an increase in contract liabilities in Aerospace, despite an increase in inventories in Aerospace Systems and PS&E

FY’25 Q1：
Although trade receivables were collected in Aerospace and Plant, increased payments such as corporate income taxes led to a cash outflow in operating cash flow

A portion of the 80.0 billion yen proceeds from the
transfer of a 20% stake in

2.Proceeds from fluidity of lease receivables and Repayment of payables under fluidity lease receivables Kawasaki Motors, Ltd., a PS&E business subsidiary, to ITOCHU Corporation was allocated to the repayment of interest-bearing debt

Aerospace Systems-
Market Overview
Commercial business
–Air passenger demand shifted from recovery to growth phase, and demand for both aircraft and engines are increasing
MOD business
–Demand growth and profitability improvement

Specific Efforts
Preparation for business expansion
–Arranging supply chain and production system for production increase
–Improving productivity and operational efficiency to acquire new business opportunities
–Steady promotion of existing projects of are expected due to Japan’s defense reinforcement policy development and mass production for MOD aircrafts and helicopters

Strengthening activities related to defense business
–Promoting efforts Seven focal areas to strengthen defense capabilities

Promotion of technology strategies based on market trends
–R&D, including the use of civilian technology in defense fields
–Utilization of Green Innovation fund of government for development of carbon-free technology
-Rolling Stock –
Market Overview Specific Efforts
Domestic Market
–Resumption of investment in rolling stock due to recovery of inbound
Overseas Market
–Demand is expected to increase due to the development of urban transportation to reduce congestion in large cities
Supply chain Risk
–Prolonged procurement of equipment, mainly electronic components, requires attention
Medium to long-term forecast
–Stable global growth is expected, including traffic development in overseas markets and the demand for infrastructure in line with economic development in Asia

Achieving quality levels trusted by customers
–Reductions of spoilage and repair costs
–Further promotion of Kawasaki Production System

Expansion of components sales, after-sales service, and maintenance business
–Promotion of remote track monitoring service for North American market
–Promotion of train condition monitoring equipment for domestic market

-Energy Solution & Marine Engineering
Market Overview
Energy, Plant & Marine Machinery

Specific Efforts
Contribution to realizing a low-carbon and decarbonized society
–Growth in demand for power supply to data centers, mainly for emergency use
–Continued demand for renewal of aging waste incineration plants

–Fuel transition from coal to natural gas in emerging countries
–Increasing hydrogen-related orders and inquiries in developed countries

Order received for two gas engines with hydrogen co- firing retrofit capability
World-Class power generation efficiency of 51.0
Convertible to hydrogen co-Firing (Up to 30% by Volume)

Ship & Offshore Structure

Proven reliability through years of stable operation
Comprehensive after-sales support

–Ship prices continue to be high, affected by the soaring cost of materials and equipment
–Ship prices continue to be high, affected by the soaring cost of materials and equipment
Entire segment

–Stable supply of fuel gas required for operation of power generation facilities
–Concerns about pressure on profits due to persistently high raw material, equipment,

Stable orders for submarines are expected
Inquiries and requests for cooperation are increasing regarding transition solutions associated with the return to LNG, as well as decarbonization solutions such as KCC※

Contribution to realizing a low-carbon and decarbonized society
World-Class power generation efficiency of 51.0
Convertible to hydrogen co-Firing (Up to 30% by Volume)
Ship & Offshore Structure
Proven reliability through years of stable operation
Comprehensive after-sales support

Solutions for decarbonized society
World’s First commercial-scale facility equipped with five key systems for Hydrogen Supply Chain Deployment

-Precision Machinery & Robot-
Construction machinery
–In China, demand, previously sluggish due to the prolonged real estate slump, has recovered in both domestic and export markets, especially for for large- scale mining equipment and units exported to Africa, Middle East and Southeast Asia
–Outside China, the European market is showing signs of recovery
–Electrification and automation/autonomy are expected to progress, driven by environmental regulations and labor shortages

Robotics
–General purpose robots
Demand remains sluggish due to U.S. tariff policies and China’s economic slowdown, but automation demand is steadily rising, driven by increasing labor costs and labor shortages

–Robots for semiconductors
The decline in demand in the semiconductor memory market bottomed out and demand is showing signs of recovery from the second half of FY2024, driven by new growth areas such as AI-related fields

-Powersports & Engine-
Market Overview
U.S. (Motorcycles)

–Despite a softening retail market, our market share remains strong
U.S. (Four-wheelers)

–Market is expected to grow over the medium to long term, but sales of recreational models, which are susceptible to loan interest rates and fuel price increases, have softened

–Market Share Expanded Through New Model Launches and Recovery from Recall Impact
U.S.(Common to both business above)
–Additional tariffs raise concerns over weakening demand.

Europe
–Despite a temporary retail slowdown following pre-regulation surge, we expanded market share through effective promotions and

Specific Efforts
Supplying products in alignment with market trends
–Continuous introduction of new models
–Realize stable supply of products by flexibly changing production and sales plans based on sales conditions
Expansion of the four-wheeler business and electrification
–Investment in development to enhance product competitiveness
–Quick response to the external environment by utilizing two plants in North America (US and Mexico)
–Launch of our first electric four-wheeler
–Contributing to the realization of a carbon- neutral society by utilizing a wide range of options centered on electrification Promoting business process re-engineering through DX successful new models

Southeast Asia
–Sports segment remains at low level, while recovering in some regions

–Achieving agile management through digitalization
–Shortened development time and reduced development costs using digital technology BCash flow Improvement
–Improve FCF by strengthening profitability and maintaining appropriate inventory levels
Full report

Source: Kawasaki Heavy Industries